Intracranial epidermoid tumors or cysts are considered benign lesions. Differentiation of epidermoid tumors from arachnoid cysts is important for appropriate patient care because the treatment is different for each lesion. Arachnoid cysts can appear very similar to epidermoid tumors on computed tomography (CT). Epidermoid tumors can grow in the cerebellopontine angle (CPA) cistern, the most common location of these lesions, resulting in trigeminal neuralgia and facial paralysis. Treatment for epidermoid tumors is exclusively surgery. Arachnoid cyst, on the other hand, is a benign condition that rarely produces symptoms. Recent advances in magnetic resonance imaging (MRI) have allowed more accurate imaging diagnosis of epidermoid tumors. This article reviews the recent advances in MRI using conventional T1W, post-contrast T1W, T2W, steady-state free precession imaging, fluid-attenuated inversion recovery (FLAIR), diffusion-weighted imaging (DWI), and proton magnetic resonance spectroscopy (MRS) in the imaging diagnosis of epidermoid tumors.